January 26, 2007
Promotional products firm thrives on reputation
The Business Journal of Milwaukee
by Katie Schmitt
Scott Paulus
National Premium’s David Schwarzrock and Kim Rivest look over some of the company’s promotional products.
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National Premium Inc. is one of the largest promotional products companies in the nation and has been in business for 40 years, but many of its prospective -- and existing -- customers are more focused on price than reputation.
"One of the biggest challenges we face is the tendency for our customers to look at this as a commodity-driven business," said Warren Lillund, vice president of sales for the Pewaukee firm.
Thus, in recent years, the management of National Premium has put more of its resources into promoting the family-owned firm's commitment to customer care, custom products and meeting deadlines. The strategy seems to be working -- sales at National Premium continue to grow and the company plans to add an office in the Netherlands.
National Premium's 2006 revenue was $23.4 million and is projected this year to be $23.6 million. Sales have increased more than $7 million since 2000.
The company has 72 employees and offices in Chicago, Minneapolis and two locations in Florida. The Netherlands office is in the works to accommodate an existing customer in Europe and expand the company's international customer base.
President and chief executive officer Dick Schmidt, 72, and his wife, Kay, started National Premium in 1967, working out of their house. Dick Schmidt worked part-time in the promotional products business and saw a demand for more businesses, so with his savings and a small loan from First Wisconsin Bank, he started his own company. Three years later, it became a full-time operation and moved to its first office in Elm Grove.
Family roles
The business in 1999 settled into its current leased office and warehouse in Pewaukee. Schmidt's son, Steve, is vice president of major accounts and his son, Scott, works in sales.
Dick Schmidt said he is considering several options for his succession plan but has not decided on one yet.
National Premium is ranked in the top 0.5 percent of the nation's promotional products and marketing companies by industry publications such as the Counselor. Its clients range from small businesses to major corporations, including Rexnord Inc., Snap-on Inc., GE Security and Dreyer's ice cream.
National Premium supplies customers with branded merchandise and services as well as awards and incentive programs for their employees.
The firm's services consist of account management, customer service, product and project management and marketing support. The staff of National Premium also conceptualizes designs, finds suppliers and assists with production of printed materials.
The firm can tap hundreds of promotional products available from suppliers including such brand names as Columbia, Cross and Titleist. A brief list of some of the items available includes yo-yos, wearables, backpacks, mousepads, coffee mugs, sports bottles and wristbands. National Premium customizes them to carry the identity of a given client's company.
National Premium emphasizes getting to know its customers and learning their needs, their budget and their marketing goals.
"We want to be a valued resource for our customers, not just a vendor," said Kim Rivest, vice president of operations.
Bevy of competitors
With an estimated 16,000-plus promotional products distributors in the country, National Premium management is well aware that numerous competitors can woo customers with lower prices.
Some of National Premium's larger customers vouch for its customer service.
Jenne Meyer of Harley-Davidson Motor Co., Milwaukee, said she has worked with other promotional products companies but said National Premium is significantly better in terms of service.
"National Premium is very good at building relationships," said Meyer, who is Harley's manager of experience development and product development. "It's not often that you find a company that is truly service-oriented anymore and they are."
Plaudits also come from an executive with Snap-on Inc., Kenosha, which relies on National Premium to supply calendars and dealer-direct catalogs. Snap-on has been a customer of National Premium for 30 years.
"So to me that's saying a lot," said Linda Miller, who is category manager for licensing.
Miller said National Premium's pricing is competitive and moreover, its staff helps out when other suppliers are unable to meet orders.
"They'll drive down in a second to make sure everything's right," said Miller. "I can count on them."
National Premium keeps up with the latest in marketing trends and products and technology, said John Gleason, vice president and chief financial officer. Even the promotional pen is no longer just a pen -- it can be a voice recorder and a laser pointer.
There are hundreds of thousands of things one can apply a logo to, from bobbleheads to luggage tags, and National Premium's staff seems eager to think of many more. Rivest said she enjoys it when clients want custom-made products and National Premium's staff develops a concept. Two examples are a coffee mug in the shape of a parrot and a bank in the shape of a company's mascot.
National Premium is committed to fulfilling every customer's needs has created a loyal customer base.
National Premium provides products for Rexnord's online company store as well as events like golf outings. Rexnord has worked with other promotions companies, but National Premium's local presence and personal touch give the firm an advantage, said Robb Clawson, Rexnord's director of marketing communications.
"I've never had them tell me they can't do something," Clawson said. "They're looking to build and maintain a relationship, not make a sale."
NATIONAL PREMIUM INC.
Address: N26 W23315 Paul Road, Pewaukee
Web site: www.nationalpremium.com
Founded: 1967
President: Dick Schmidt
Annual revenue: $23.4 million
Employees: 72
Business plan: Promotional marketing company
Growth plan: Increase sales by opening more offices to better accommodate clients from geographic areas beyond metro Milwaukee
LESSONS LEARNED
What has been your toughest business decision? "Going full-time. With four young children, we had lots of mouths to feed."
What has been your best business decision? "The best decision was joining the TEC (The Executive Committee) in 1989. This has provided me with continuing business education."
What was your biggest mistake? "The purchase of a new computer system in 2000. It was a disaster."
What is the best way to keep a competitive edge? "Our competitive edge is performance. Much of our business is event-driven. Making sure that the customer gets the order on time and correctly is our greatest priority."
What is your yardstick of success? "We measure our success by the repeat business and continued growth of our customers."
What are the most daunting issues facing your company right now? "The most daunting issue facing us is the selection of a new ERP (enterprise resource planning computer) system."
Answers by Dick Schmidt
